Australian home prices look like they're falling faster in early spring, especially in Melbourne

The change of season has not brought much joy to Australia’s property market.

Based on data so far in September, it looks like the pace of nationwide price declines are accelerating.

Much of the weakness seen this month reflects faster price declines in Melbourne, rather than Sydney.

If Spring is truly the best time to sell your home in Australia, 2018 has been a disappointment for vendors so far.

Nearly a month into the season, nothing much has changed.

There’s still a substantial amount of stock listed for sale compared to prior years, especially in Sydney and Melbourne, while auction clearance rates, even with fewer properties under the hammer than a year ago, continue to hover around 50%.

After declining for 11 consecutive months, it appears a near certainty the streak will extend to 12 when CoreLogic releases its monthly Hedonic Home Value Index for September in early October.

And not only are values set to fall again, it looks like the pace of declines may be accelerating based on the chart below from Macquarie Bank.

Macquarie Bank

It shows a variety of house price measures from Australian Property Monitors (APM) and CoreLogic, including the latter’s daily capital city index tracking price movements across Australia’s mainland state capitals in blue.

The two CoreLogic measures are presented in annualised monthly terms, and have been adjusted by Macquarie to remove any distortions cerated by seasonal patterns.

Based on data received so far in September, it suggests the pace of price falls are accelerating in early Spring.

While further weakness in Sydney has contributed to this move, the bulk of the nation acceleration appears to have been driven by Melbourne.

Macquarie Bank

At current pace, prices in Australia’s second-largest and second-most expensive capital are falling at an annualised monthly pace in excess of 10% per annum, a level not seen since the GFC.

In nominal terms, Melbourne’s median home price has fallen 2.9% over the past year, according to CoreLogic data released on Monday, less than half the 6.1% decline reported in Sydney over the same period.

Should the trends seen so far in September be maintained, the gap between the two looks set to narrow in the months ahead.